By Category: New Business Strategies
Interview with Mattel's ex-procurement chief
by Todd Knutson | published on March 23, 2010
When you mention to a new business person that "procurement" is getting involved, the typical reaction is dread. You've built rapport with your prospect, established their need, demonstrated how your agency can meet it, and now someone who doesn't know you is is going to weigh in, with their ability to say, "no", hanging over your head. Your fear is that all procurement people care about is getting the lowest price, so the months you've spent getting where you are today may have been a total waste.
Dave Wilson, Ex-Procurement chief at Mattel begs to differ:
The biggest myth is that procurement people are the devil incarnate; most of us are decent, honorable people!
Brent Hodgins of Mirren interviewed Dave last month. Here are some highlights:
On lowest cost vs. quality:
- Cost is certainly one factor, but, for agency services, it should be less important.
- A good procurement process should weight quality and service above cost.
- Lack of top-line revenue growth during the recession put an emphasis on reducing cost; revenue growth should reduce that emphasis.
On the biggest mistakes that agencies make when dealing with procurement:
- Viewing them as "the enemy".
- Not building relationships with individuals in the procurement department.
- Not recognizing that procurement's job is to protect the client's interests.
On who should negotiate with procurement, and what they should be prepared for:
- Have people separate from account service do the negotiating.
- Be prepared.
- Be objective.
- Procurement may try to intimidate: you can't fall into the trap and become emotional.
- Having a lawyer present to deal with contract language may be helpful.
David will be providing many more insights at the Mirren New Business Conference 2010. I've attended the conference since its inception and recommend it. If you plan to go and haven't registered yet, you'll receive a discount if you use this code: LIST2010. [Neither I nor The List have any financial interest in the conference.]
As easy as...Above and Beyond Client Service
by Todd Knutson | published on March 18, 2010
True story from a week ago: Midwest branding and packaging agency seeks Midwest healthcare account. Agency gets to the top of the list of prospective partners - before even meeting with the marketing director. How did they do it?
Before I tell you the secret to their success, let's refresh our memories about first impressions. If you go to Dictionary.com, you'll see it defined as "first consideration or judgement". Recall, also, the statistic from a now-forgotten study: "You have seven seconds to make a first impression". One thing we know for sure, humans tend to quickly make judgements about other people. Oftentimes, that first judgement lasts a long time and takes a lot of contrary evidence to overcome it after it's fixed in our memories.
Twenty-five years ago, I met a guy in college who I thought was incredibly arrogant; I didn't want to have anything to do with him. However, in the last six months, I've had multiple interactions with him and have had to completely re-evaluate my opinion of him. Somewhere along the line either a) I judged him wrong, or b) He changed. I don't know which it is, but I now realize that my 25-year-old first impression was incorrect. The problem with first impressions, however, is that if he was the agency and I the prospective client, he was out of consideration, and didn't even know it.
Back to our Midwest branding agency.
Here's a direct quote from the marketer they're proactively reaching out to. I'm not going to attribute the quote as I don't have permission to do so, plus, it was a confidential communication between the two parties that was shared with me for purposes of helping other ad agency new business people and their principals to (hopefully) improve:
Got the package. Thank you. And yeah, you weren't kidding when you said you guys were all about client service. Most impressed that you tracked the package. Just as impressed with your follow-up voicemail. Having spend 20 plus years in the agency business, I am all about above and beyond client service. Unfortunately, too many of our suppliers/partners do not subscribe to that same way of thinking. After a week of having to make simple demands of such folk - your attention and "Johnny on the spot" like attitude was a refreshing change.
What they did was nothing more than go slightly above and beyond the expectation of the client:
- They sent information about the agency at the request of the marketer
- They followed up by email to say that it was on its way
- They followed up by phone (voicemail) to check that it arrived
- They tracked the package to be doubly-sure that it got to the correct office
- They communicated all this in a professional and courteous way to the prospect
Pretty simple stuff, but as stated in the quote, unfortunately uncommon.
If doing these little things can be so effective, think about the opportunities that abound to help your agency stand out!
The glue in the marketing organization
by Todd Knutson | published on February 24, 2010
The marketing organization inside many of your larger prospects or clients is becoming increasingly fractured and siloed, creating a big opportunity for agencies to exercise leadership and vocally represent the voice of the customer. So argued Larry Light, President and CEO of Arcature yesterday at the 4As Transformations 2010 conference in San Francisco.
Larry is a management consultant credited with helping to turn around McDonalds and Nissan.
He made the case that in a big client's marketing organization, you might find a CMO and various chiefs of insight, analytics, merchandising, strategy, branding, and maybe more. Each has turf they're trying to protect and grow, and each is firmly entrenched in their own silo. From his experience, Larry has found that silos only serve to decrease accountability and increase the ability to blame others when there's a problem.
What's the opportunity for ad agencies, and new business people in particular? Become the voice of the customer. In many of the companies he's worked with, Larry said that no one truly represents the customer. That's a leadership role agencies are perfectly suited to assume.
Agencies shouldn't just be coordinators of marketing communication - not when the real prize is to be the glue that holds the client's marketing organization together.
Assuming the mantle of "the voice of the customer" would put your agency in the role of saying to your client,
"What kind of exciting future can we create for your business?"
Here are two important ways that Larry says you can do this:
- Come up with a real insight. Before you state that it's an insight, though, you'd better be surprised by what you learned. If your insight is that "people like food that tastes great", keep digging.
- As a result of your insight, how will behaviors change? If the insight doesn't cause you and your client to change the way you do things, then you only created an "interesting insight". You need a business-changing insight.
There are clear opportunities here for new business pros to use insights to crack open prospects' doors. Likewise, for agency management to think about the roles you play in your clients' organizations, and how you can better represent the voice of the customer to assume a greater leadership role.
Thought-provoking stuff; hope it generates an idea or two.
Where and how to successfully prospect
by Todd Knutson | published on February 18, 2010
There are only a few people in the U.S. who have a broad-based and in-depth view of the proactive new business market, and who can speak to all geographic regions, industry categories, and types of services being purchased by large and small clients alike. One of them is Dave Currie, President of Catapult New Business. I interviewed him yesterday to get an insider's view of where and how to successfully prospect - today.
What categories are currently hot?
- Consumer Package Goods (CPG).
- Retail - both big-box and super markets.
- Consumer banking - particularly regional banks who want to acquire customers from their larger rivals.
- Travel and tourism.
- Education - colleges and universities (all types), and MBA programs.
What outreach techniques are most effective?
- Email marketing with trackable links to landing pages.
- Rifle vs. shotgun: carefully identify your hard targets, but be sure you have a lot of them.
- Small email batches (less than 20 per group).
- 60-second, HD, production-quality video case studies.
- Webcasts with niche content.
What messaging is most effective?
- Show something they may not know, that's a result of research.
- What's your solution that will help your prospect - NOT why your agency is best.
- Specify your value: why should they talk to you?
What follow up techniques are most effective?
- Plan for 15 touch points.
- Variable media: email, phone, webcast, direct mail, video case studies.
- Concise voicemail messages, each with a value message.
- Relevance: get to the point very quickly, with specifics.
- Consistency: success only comes if you regularly follow up.
How fast is work being won?
We've seen first meetings progress to projects in a week, as well as 6 months. The key is consistent follow-up, at least weekly, by phone as well as other touch-points. Be proactive and suggest days and times to connect with your prospect by phone.
Most importantly: "Ask for the meeting. Marketers are taking meetings today that they wouldn't or couldn't take last year."
7 ways to make your committee more effective
by Todd Knutson | published on February 09, 2010
Many smart ad agency Presidents create new business committees with the best of intentions: bring together the best and brightest in the agency who touch new business, give them a mission and deadlines, and then watch them work together as a unified team and land new accounts.
Too often, the committee never realizes its potential.
Jason Zweig of The Wall Street Journal recently wrote a column titled, "How Group Decisions End Up Wrong-Footed". Extrapolating from his article, which addresses how committees lost billions of dollars during the recent financial crisis, we can learn a lot about how to make our new business committees work more effectively. Here are his suggestions:
- A committee must be made up of people with different perspectives.
- Each member must be unafraid to speak their mind.
- Each member must be able to select and process information effectively.
- Each member must demonstrate their ability to learn from their mistakes.
- At the outset, the agency President must objectively determine and specify what success looks like for the committee. Each success factor must be measurable.
- As the committee considers various options, they should split themselves into two groups: the "pro" group and the "con" group. Each side should generate the best arguments they can for each position, being sure to consider what success and failure looks like for each.
- As recommendations are being considered, the committee needs to ask "the five whys". For example, why is one idea superior to another? Why does the proposer of that idea know that their proposal is right? (For a new business example of this, see this post.) Zweig argues that,
If you ask five such "why" questions in a row, you are likely to expose any weak points in the advice.
While I have a bias against new business committees, as I look back on my experience on various committees I can see how implementing Zweig's recommendations would have improved the membership, and more importantly, the healthy functioning of each group. I'll be curious to hear how these ideas work for you.
Know your type
by Todd Knutson | published on December 18, 2009
This is a guest post from Craig Kavicky, Vice President at Big Red Rooster, an independent research, strategy, and design company in Columbus, Ohio.
In recent posts, Todd has referenced the business development axiom relationship-building and compared it to dating. Nothing is more true than the dating reference, and like identifying good prospective dates, identifying good prospective clients requires that you know your type.
All too often, collaborations are doomed by the same difficulties that have felled many a date: bad chemistry, poor communication, and misaligned expectations. We've all gotten into these situations (particularly in lean times) while seeking any work, rather than the right work.
Your first, best goal is to find the best dates in the least amount of time. It all starts with your contact in the prospective client organization.
Asking some simple questions at the start can make all the difference:
- Is your contact a change-agent?
- Do they invest in the value you bring per hour or discounts?
- Do they share full disclosure and provide time for informed responses?
- Are they a details person or do they look for comprehensive help to champion their cause?
- How is your contact’s role integrated into the organization for budgets and what's their criteria for decision-making?
- Is your contact chasing trends or making them?
- What other programs is your contact working on and how does this fit in with their annual goals?
- What's their past experience with firms or agencies? Preferences?
- How does your contact view his/her competition and the moves they're making?
- What's their vision for the success of the program and its impact on their role within the organization?
- Do they believe in committing to one firm or do they intentionally spread work out?
Keep in mind that the compatibility of organizations plays a significant factor in the harmony between them. For example, if an agency represents Hustler, it may have difficulty meshing with Wal-Mart. Recognizing this, you can easily translate the answers to these questions into all the criteria you need to evaluate good dates from bad ones. The questions take a little time to ask and answer, but it's time invested at the front end that will save much more later. And, as we all know, time is at the core of what business development leaders try to save every day.
We assume that skilled business developers already know their best fit within verticals or in targeted specialty roles, so the goal of talking to the right people becomes one of disqualifying the wrong ones. However, in my experience, most business developers will try to over-develop a poor fit until the end of time.
The right thing to do is to use these questions to identify prospects who aren't a good match. It's not always easy to do in one conversation, but then again, that's the nature of courtship.
If you don't know your type, you may not be their type.
"Jarring" is not the reaction you want
by Todd Knutson | published on December 11, 2009
A few weeks ago I wrote about how not to self-destruct during your first meeting. Unfortunately, in this true story the agency became the talk of the prospect's office. Here's the back-story.
Recall that this was a "good agency located in the Southwest" that was asked to submit a proposal for an initial research project estimated at $50,000. They took three and a half weeks to respond and then submitted a proposal with a price tag of $191,000.
At the time I wrote, "odds are, the project - any project - is in jeopardy". And that's what happened, though the prospect's "No Thank You" response was polite:
We were looking for something more in the moment that could present us with company growth.
Understandably, as the prospect explained on the phone, the agency became "the talk of the office for a day" when it became known that their proposal was three times the budget - a budget that was communicated during the initial meeting. She said that the word to describe her reaction to the proposal was "jarring".
After a conversation with the prospect, we can summarize exactly what went wrong.
- Didn't listen: They failed to listen to what was said, as well as what was implied.
- Didn't view the prospect's business situation: They failed to look at the prospect's competitive situation, their culture, as well as the type of project appropriate for a company their size.
- Had no sense of urgency: They took 3.5 weeks to submit the proposal, which said a lot of negative things about them.
- Failed to meet the prospect's expectations: Proposing an initial project that will cost three times the budget is a bad idea, plus its scope was far beyond what was needed or desired.
It's one thing to lose a project after a hard-fought, competitive dual. It's another to beat yourself.
The silver lining of this story, however, is that all this is fixable. You just need to focus on your sales fundamentals:
- Ask questions.
- Listen carefully to what's said and not said.
- Summarize what you've heard.
- Agree on next steps, including scope and due dates.
- Deliver as promised and expected.
This agency likely fell down on #2, #3, #4, and #5. Let's all learn from their mistakes.
Wonderfactory prototype is an exciting development
by Todd Knutson | published on December 03, 2009
The Wonderfactory, in collaboration with Time, Inc., helped design the prototype of what Sports Illustrated magazine might look like on a tablet computer.
Revealed on December 2nd, this innovation could allow magazines and other periodicals to charge for content on tablet computers, and give advertisers data on who’s seeing their ads.
Stephanie Clifford of the New York Times broke the story. A few highlights:
- Apple, HP and other computer manufacturers are expected to offer tablet computers sometime next year.
- "The general guess is they’ll be like big iPhones, with interactive touch-screens. The larger size makes it feasible to put a magazine page on a tablet."
- The functionality is anticipated to let readers interact with the magazine stories, ads, and content, watch videos, see additional photos, get live updates, and particpate with what's going on in the story.
- Readers will also be able to email, print, save, and share stories and content with friends via social media channels.
From an ad sales perspective, this should create opportunities for media departments across the country. It's anticipated that readers will be able to use the touch screen to interact with ads, view video clips, product comparisons, prices, and purchase directly from a story. In turn, this should open up a whole to way of thinking about ads that will lead to increased innovation.
From a new business perspective, you have to think that this type of take-it-with-you technology - a tablet that's bigger than your i-phone but much more portable than a Kindle - will open up a another vehicle for innovative apps and offerings. Ad agencies and other marketing services firms should be able to leverage innovative offerings to generate both organic growth and new business.
While I'm generally not an early-adopter, the thought of being able to do most of my "required reading" on a highly portable tablet computer that provides online interactivity, is really exciting.
Reveal the answer to close more new business
by Todd Knutson | published on December 02, 2009
Before a prospect can become a client, they have to clearly understand the value of working with your ad agency or marketing services firm.
Does your current new business process demonstrate what the positive impact of using your services will be? Do you clearly communicate both the dollar and non-dollar value of doing so?
One of the best ways to demonstrate value is to help your prospect answer the question, "So what?"
For example, if your rapport-building questioning reveals pain within your prospect's company (e.g. revenue is slowing, trouble with a new product launch), "So what?" questions around this type of pain might be, "What will happen if revenue continues to slow?", or, "What will happen if the product launch fails?"
On the other hand, if your questioning reveals a new opportunity, or aspiration, "So what?" questions may be, "If you don't pursue this, will someone else make this potential product a reality?", or, "If you can bring this to market in the next six months, how might your division better compete against your arch rival?"
Sometimes, the answer to these type of questions may be as simple as helping your prospect get promoted - or keep their job. But, in most cases it's going to be up to you to demonstrate how using your services will directly, clearly and positively contribute to resolving the pain or fulfilling the opportunity facing your prospect.
Recognize that your biggest competitor may be inaction. Expect to have to create a sense of urgency in order to get your prospect to purchase your services. The magnitude of the sense of urgency will be determined by how well you help your client answer your "So what?" questions, and a big part of closing the deal will be your ability to quantify the positive impact of using your firm.
Here are three ways to quantify the impact of using your services:
- Dollar benefit. This could be "new" dollars generated - as in revenue from a new product; or, an increase in dollars - as in better marketing driving increased sales from existing products; or, dollars saved - as in less costly marketing. Whatever the situation, whether you're solving a pain or helping them achieve a goal, you need to be able to quantify the financial impact of using your services.
- Non-dollar benefit. People buy from people they like. Don't diminish the positive benefits of working with your firm, whether it's your high quality team, your company's reputation, motivating influence, etc. Recognize the soft intangibles that you bring and don't forget to incorporate them into your conversations.
- Your firm vs. alternatives.Your prospect may be considering a competitor, internal resources, or doing nothing. You're selling against all of them. To overcome these very real obstacles, you may need to be able to sell:
- Why you're better. When faced with a competitor or internal resources, what are the tangible and intangible reasons why going with your firm is a better business decision?
- What they may lose. There are potential costs to your prospect if they do nothing about a pain or don't pursue an aspirational goal. You need to be able to paint a picture of their potential loss so they can visualize themselves achieving their objective - with your help, of course.
Asking "So What?" questions is simply finding out what's at the root of their pain or aspiration. Why is it important to them? What's the potential upside and downside?
Understanding what's behind the situation and getting your prospect to verbalize it is a key part of the new business process, and to your closing more new business.
I hope this helps.
Help them create a new future
by Todd Knutson | published on November 23, 2009
The common approach to selling marketing services is, "Find their pain, and then show how you can solve it." But, if you only focus on your prospect's pain, you're leaving half the potential new business on the table.
A client who hires an ad agency or other marketing services provider is looking to either:
- Solve a problem or pain.
- Grow, improve, innovate, etc.
After you build rapport, if your questions only focus on identifying and solving their problem(s), you may miss all the fun - helping them grow, innovate, or create other opportunities in the future. Who knows what they may be, but you'll definitely want to be part of it.
Here are a few questions that will get your prospects or clients talking about what they want, hope for, or aspire to:
- So, what's going on at your company lately?
- What do you want to get done in the next year or so?
- What parts of the business hold the most promise for the next couple of years?
- What are a few things that your competitors are doing that you're watching?
- How might you improve on what they're doing?
- What do you need to get these things done?
- What do you need to know that you don't know yet?
The great thing about these questions is that they're not too-personal - they're not threatening. They're also open-ended, and future-oriented. You can just as easily ask them to a prospect or a client.
Since most, if not all, of your prospects and clients think a lot about how they'd like to change and improve, these questions may be just what they need to start talking.
And, once you get them talking, you're likely to hear things you've never heard before, which will probably open up a whole new world of potential new business opportunities.